Looking for a loan may feel really hard at times.
It’s hard for some people to figure out which types of loans are really going to work with their life.
In order to help you narrow down the choices, we’re going to give you 5 reasons why the piggyback loan type might just be the right fit for you.
This is just the tip of the iceberg though.
If you find yourself interested in learning more, then you’ll want to check out the main article about the loan, the pros and cons this loan type, and the answers to some of the most common questions about the piggyback loan.
In addition, you will want to know about the loan limits that are associated with this loan.
They are a little bit complicated, which is why we have created an article just about it.
Here's a quick rundown of our list:
- Reason 1 - The Home You’re Looking at Is Slightly More than $424,100.
- Reason 2 - Having a Home Equity Line of Credit Fits Your Future.
- Reason 3 - You Have a High Credit Score.
- Reason 4 - You Don’t Mind The Down Payment.
- Reason 5 - You Don’t Want PMI.
If after reading all of this information you are interested in getting started with this loan type, you can always contact me and I will help you get started on not only getting the loan you need but looking for the home you want as well.
Reason 1 - The Home You’re Looking at Is Slightly More than $424,100.
When you’re looking in San Diego, you’ll find that most houses are over the conventional limit of $424,100.
There are many loan types that follow that limit, but San Diego homes mean that you need something a little bit more than that limit in order to be able to get a decent home.
This loan uses $424,100 as the limit for the main portion of the loan, but that doesn’t include the down payment and the portion of the loan that exists as a home equity line of credit.
The structure of this loan does mean that you’ll have a little bit more wiggle room.
This is fantastic news for everyone that is looking for a home in San Diego as it means that you’ll be able to get a useful loan that also gets you a decent house.
You don’t have to go all the way up to the edges of the loan limit for your home, but this does mean that you will be able to.
Reason 2 - Having a Home Equity Line of Credit Fits Your Future.
Home equity lines of credit work as a sort of credit card in essence.
In this case, you will be paying off the balance of the credit before you are able to put anything more on it.
But the line doesn’t disappear even if you pay off the entire amount.
You can leave the line open so that you can use it in the future.
If you’re purchasing a home that you want to do a little work on in the future, this can be a great choice.
You will be able to use that line of credit in order to help you with the payments.
In addition, the home equity line of credit won’t earn interest on it while the line of credit is empty.
This means that there’s no penalty associated with having the line open even after you’ve finished paying it off.
You don’t have to use this line of credit on your home.
You will be able to use it on so much more than that once you have paid off the amount that was on it.
This can be great if you are thinking about paying for college for kids later on.
Blog Post Interrupt – What is a “No Cost” Loan?
Reason 3 - You Have a High Credit Score.
This may be something negative for some people, but it is part of qualifying for the loan.
Having a high credit score is associated with being able to pay off loans and get rid of debt effectively.
It is an indicator to the lender that you are going to be responsible for the loan.
If you have a credit score of 680 or higher, then this loan is going to be a real possibility.
If your credit score is a bit lower than that, then there are many other options that are out there that will be able to fit you quite a bit better.
Reason 4 - You Don’t Mind The Down Payment.
One of the biggest barriers to those that would be interested in buying a home today is the fact that down payments are a little bit more than most people can save up for.
The regular payments after the down payment are usually within their ability to spend.
But this loan doesn’t have a particularly low down payment.
The amount will be 10% of the amount that you are paying for the home.
For some people, that 10% will be impossible.
For others, you might be considering using gift funds to pay for the down payment so that you are able to get this loan.
However, this loan is one that you might not qualify for if you are going to need to use gift funds for.
If you’re looking at this loan, you will want to have the funds for that down payment to have the best chance of qualifying for the loan.
Reason 5 - You Don’t Want PMI.
PMI is associated with loans that have a down payment that is less than 20%.
While you might initially be thinking that this loan will have PMI because the down payment is only 10% of the total amount, it is not true.
The way that this loan is structured, you will be actually paying a 20% down payment because of the combination of the home equity line of credit.
This means that the PMI won’t become part of the equation.
This is a way that a lot of people want to save money, but the ways to do it aren’t that easy.
The piggyback loan is one of the easiest ways to get around the PMI that other loans deal with.
The lack of PMI is also one of the reasons why your loan has a higher qualifying credit score.
The normal protections aren’t in place, so they need to put other restrictions in place to make sure that the borrower is going to be responsible.
If you find yourself interested in learning more, then you’ll want to check out our main article, the pros and cons about the loan, the answers to the most common questions about this loan type, 5 reasons why, and more information about the loan limits that are available with this loan.
What do you think?
I would love to hear your comments below - or cal/text me at (760) 297-4539.
Your Piggyback Insider,
7 "Did You Know" San Diego Loan Secrets Revealed!